While it is understandable that the super-rich and wealthy, who have lost a large portion of their retirement and investment funds are unanimous in their condemnation and cries of betrayal of trust, and the editorials of all the prestigious newspapers and weeklies have joined the chorus of moral critics, there is much to praise in Madoff’s deeds, even if such praise was not at the heart of his fraudulent endeavor.

1. The swindle of $50 plus billion dollars may make a big dent on US Zionist funding of illegal Israeli colonial settlements in the Occupied Territories, lessen funding for AIPAC’s purchase of Congressional influence and financing of propaganda campaigns in favor of a pre-emptive US military attack against Iran. Most investors will have to lower or eliminate their purchase of Israel bonds, which subsidize the Jewish State’s military budget.

2. The swindle has further discredited the highly speculative hedge funds already reeling from massive withdrawals because of deep losses. Madoff’s funds were one of the last ‘respected’ operations still drawing new investors, but with the latest revelations it may accelerate their demise. The dismissed promoters may finally have to perform an honest, productive day’s work.

3. Madoff’s long-term, large-scale fraud was not detected by the Securities and Exchange Commission (SEC) despite its claims of at least two investigations. As a result, there is a total loss of credibility. More generally, the SEC’s failure demonstrates the incapacity of capitalist government regulatory agencies to detect mega frauds. This failure raises the question of whether alternatives to investing in Wall Street are better suited to protect savings and pension funds.

4. Madoff’s long-term association with NASDAQ, including his chairmanship, while he was defrauding his clients of billions, strongly suggests that the members and leaders of this stock exchange are incapable of recognizing a crook, and are prone to overlook felonious behavior of ‘one of their own’. In other words, the investing public can no longer look to holders of high posts in NASDAQ as a sign of probity. After Madoff, it may signal time to look for a king-size mattress for safe keeping of what remains of a family’s wealth.

5. The investment advisors from top banks in Europe, Asia and the US managing billions of funds did not carry out the most elementary due diligence of Madoff’s operation. Apart from severe bank losses, tens of thousands of influential, affluent and super-rich lost their entire accumulated wealth. The result is total loss of confidence in the leading banks and financial instruments as well as the general discrediting of ‘expert knowledge’. The result is a weakening of the financial stranglehold over investor behavior and the demise of an important sector of the parasitic ‘rentier’ class, which gains without producing any useful commodities or providing needed services.

6. Since most of the money stolen by Madoff came from the upper classes around the world, his behavior has reduced inequalities – he is the ‘greatest leveler’ since the introduction of the progressive income tax. By ruining billionaires and bankrupting millionaires, Madoff has lessened their capacity to use their wealth to influence politicians in their favor – thus increasing the potential political influence of the less affluent sectors of class society…and inadvertently strengthening democracy against the financial oligarchs.

7. By swindling life-long friends, self-same ethno-religious investors, narrow ethnically defined country club members and close family members, Madoff demonstrates that finance capital shows no respect for any of the pieties of everyday life: Great and small, holy and profane, all are subordinated to the rule of capital.

8. Among the many ruined investors in New York and New England, there are a number of mega slumlords (real estate moguls), sweatshop owners (fancy name-brand clothes and toy manufacturers) and others who barely paid the minimum wage to their women and immigrant laborers, evicted poor tenants and swindled employees out of their pensions before moving their operations to China. In other words, Madoff’s swindle was a kind of secular ‘divine’ retribution for past and present crimes against labor and the poor. Needless to say, this ‘unconscious Robin Hood’ did not redistribute the money fleeced from the employers to their workers, he reinvested part of it in charities which enhanced his philanthropic image and to payout to some of his early investors so sustain the overall Ponzi scam.

9. Madoff struck a severe blow against anti-Semites who claim that there is a ‘close-knit Jewish conspiracy to defraud the Gentiles’, laying that canard to rest once and for all. Among Bernard Madoff’s principle victims were his closest Jewish friends and colleagues, people who shared Seder meals and frequented the same upscale temples in Long Island and Palm Beach.

Bernie was discriminating in accepting clients, but it was on the basis of their wealth and not their national origin, race, religion or sexual preference. He was very ecumenical and a strong backer of globalization. There was nothing ethnocentric about Madoff: He defrauded the Anglo-Chinese bank HSBC of $1 billion dollars and several billions from the Dutch arm of the Belgian bank Fortes. $1.4 billion was from the Royal Bank of Scotland, the French bank BNP Paribas, the Spanish bank, Banco Santander, the Japanese Nomura; not to mention hedge funds in London and the US, which have admitted holdings in Bernard Madoff Investment Securities. Indeed Bernie was emblematic of the modern up-to-date, politically correct, multicultural, international…swindler. The ease with which the super rich of Europe forked their fortunes over caused one Madrid-based business consultant to observe that, “picking off Spain’s wealthiest was like clubbing seals…” (Financial Times, December 18, 2008 p.16)

10. Madoff’s swindle will likely promote greater self-criticism and a more distrustful attitude toward other potential confidence people posing as reliable financial know-it-alls. Among self-critical Jews, they are less likely to confide in brokers simply because they are zealous backers of Israel and generous contributors to Zionist fund drives. That is no longer an adequate guarantee of ethical behavior and a certificate of good conduct. In fact it may raise suspicion of brokers who are excessively ardent boosters of Israel and promise consistent high returns to local Zionist affiliates – asking themselves whether this business about ‘what is good for the …’ is really a cover for another scam.

11. The demise of Madoff’s enterprise and his wealthy liberal Jewish victims will adversely affect contributions to the 52 Major Jewish American Organizations, numerous foundations in Boston, Los Angeles, New York and elsewhere, as well as the Clinton/Schumer militarist wing of the Democratic Party (Madoff bankrolled both of them as well as other unconditional Congressional supporters of Israel). This may open Congress to greater debate on Middle East policy without the usual high volume attacks.

Conclusion:

Madoff’s swindle and fraudulent behavior is not the result of a personal moral failure. It is the product of a systemic imperative and the economic culture, which informs the highest circles of our class structure. The paper economy, hedge funds and all the ‘sophisticated financial instruments’ are all ‘Ponzi schemes’ – they are not based on producing and selling goods and services. They are financial bets on future financial paper growth based on securing future buyers to pay off earlier cash ins.

The ‘failure’ of the SEC is totally predictable and systemic: The regulators are selected from the regulatees, are beholden to them and defer to their judgments, claims and audit sheets. They are structured to ‘miss the signs’ and to avoid ‘over-regulating’ their financial superiors. Madoff operated in a milieu of a Wall Street where everything goes, where impunity for mega-bailouts for mega swindlers is the norm. As an individual swindler, he out-defrauded some of his bigger institutional competitors on the Street. The whole system of rewards and prestige goes to those best able to juggle the books, to cover the paper trails and who have willing victims begging to get fleeced. What a mensch, this Madoff!

In a few days, one individual, Bernard Madoff, has struck a bigger blow against global financial capital, Wall Street and the US Zionist Lobby/Israel-First Agenda than the entire US and European left combined over the past half century! He has been more successful in reducing vast wealth disparities in New York than all the white, black, Christian and Jewish, reform and mainline Democratic and Republican governors and Mayors over the past two centuries.

Some right-wing conspiracy theorists are claiming that Bernie is a secret Islamic-Palestinian agent (from Hamas) who set out to deliberately undermine the financial base of the Jewish State of Israel and its most powerful, affluent and generous US backers and foundations. Others claim that he is a closet Marxist whose swindles were carefully designed to discredit Wall Street and to funnel billions into clandestine radical organizations – after all…does anyone know where the lost billions have gone? Unlike the leftist pundits, bloggers and protest marchers, whose earnest and public activities have had no effect on the rich and powerful, Madoff has aimed his blows where it hurts the most: Their mega-bank accounts, their confidence in the
capitalist system, their self-esteem and, yes, even their cardiac well-being.

Does that mean we on the left should form a Bernie Madoff Defense Committee and call for a bailout in line with Paulson’s bailout of his Citibank cronies? Should we proclaim “Equal bailout for equal swindlers!”? Should we advocate his flight (or his right of return) to Israel to avoid a trial? It might not fly with his many Jewish victims to make the case for an Israeli retirement for Bernie.

There is no reason to mount the barricades for Bernard Madoff. It’s enough to recognize that he has inadvertently rendered an historic service to popular justice by undermining some of the financial props of a class-ridden injustice system.
-James Petras (Excerpt: "Bernard Madoff: Wall Street Swindler Strikes Powerful Blows for Social Justice", Information Clearinghouse, 12.20.2008. Image: -VioletPlanet, The Hero Factory, 2.26.09).